How COVID-19 changes the retail equation for the holidays

The holiday season is rapidly approaching, which usually means Black Friday and Cyber Monday sales and last-minute mall runs are on the horizon. This year, however, will be different in several important ways.

A new survey of 2,000 U.S. consumers reveals a clear behavior shift. Among the key online shopping insights revealed by the data are new customer attitudes toward the ease of shopping online, new purchase patterns, and new payment behavior.

COVID-19 has already changed the way consumers shop in 2020

The risk of shopping in person in 2020 has forced more consumers to buy online. Sixty-nine percent of consumers surveyed by Marqeta have increased their use of online retail sites in 2020, with 51% shopping online at least weekly. 

This shift to online shopping has, in turn, moved more retailers to improve their e-commerce experience to meet consumer demand. Online sales have been crucial for retailers looking to stay afloat during the pandemic and provide consumers a flexible and safe way to purchase items. With the growth in online retail, consumers are now able to find exactly what they need from the comfort of their own home. Seventy-seven percent of consumers surveyed say it’s easy to purchase everything they need online. 

The added convenience of e-commerce in 2020 has driven consumers to try out new platforms during COVID-19, even for their everyday shopping. New online shopping insights into purchase patterns include:

• In 2020, 65% of consumers surveyed have made an online purchase through a platform, app, or store that they had never used before. 

• Consumers are shopping for everyday goods online: 30% shop for food and groceries, 23% for clothing, 21% for household goods, and 13% for electronics.

Going into the holiday season, digital commerce is expected to soar even higher this holiday season 

With the holidays right around the corner, consumers are already thinking about how they’ll be able to get everything they need to make this year feel as “normal” as possible. 

Although we’re still navigating through the uncertainty of 2020, the majority of consumers are not expecting to limit their spending this year, and 72% of those surveyed expect to spend the same or more during the holidays as they did in 2019. 

Online shopping has already become the preferred holiday shopping staple, but in 2020 this gap will reach staggering proportions. People surveyed were twice as likely in 2019 to do all or most of their shopping online than offline. In 2020, the online number could be as much as seven times higher. Some online shopping insights into attitudes:

• 63% percent of consumers are planning to shop online for most or all of their holiday spending, compared to the 43% of people who said they did their shopping mostly or all online in 2019. 

• 9% of consumers expect to do most or all of their holiday shopping at brick-and-mortar stores this year. This is less than half of the 23% who reported doing the same last year. 

How consumers plan on shopping for the holidays: The rise of new digital platforms during COVID-19

As consumers went digital during COVID-19, digital payment platforms like point-of-sale financing (such as Buy Now, Pay Later services) and on-demand delivery services have seen a surge in adoption. 

The ability of digital payment platforms to provide consumers with convenience and security at the point of sale have made them attractive options for consumers, and they stand to play an integral part in this season’s holiday shopping experience. Among the online shopping insights into payment methods: 

• 48% of all consumers plan to use a Buy Now, Pay Later service to make holiday purchases this year. 

• 53% of consumers would use a Buy Now, Pay Later service for all their holiday shopping if they could.

• 69% of consumers plan to use an on-demand delivery service to order food for holiday meals. 

Our survey suggests that COVID-19 will continue to drive consumers towards online commerce options, and we can expect an additional surge in adoption of digital payment platforms this holiday season as consumers look for safer and more convenient ways to shop.

Find out how Marqeta’s platform supports point-of-sale financing companies including Affirm, Afterpay, and Klarna — and its on-demand delivery customers including DoorDash, Instacart, and Postmates — to keep up with the increase in demand and volume during this time. 

View Part One of our 2020 State of Payments Report on mobile wallet adoption during COVID-19 here.